Credit: Aleksei Smirnov (HSE University)
Aleksei Smirnov, Assistant Professor, HSE University Faculty of Economic Sciences, and Egor Starkov, Assistant Professor, University of Copenhagen, have constructed a mathematical model that explains why it is advantageous for sellers not to delete negative reviews of their products. A study detailing this conclusion has been accepted for publication in
Empirical studies have indicated that consumers are more likely to buy a product with a rating slightly below a perfect one rather than a perfect one. Using game theory, the researchers analysed how negative reviews affect sales.
The researchers model, which they presented in their paper Bad News Turned Good: Reversal under Censorship , involves two sets of participants: sellers, who know the true quality of the products they are selling and can selectively publish reviews about it, and buyers, who do not know a product s quality and can be categorized as either naïve or rational . Ra